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May 5, 2018

Budget squeeze threatens Indian Army's preparedness for possible two-front war

Sometime this year, the Union minister for defence Nirmala Sitharaman is
to issue a fresh set of operational directives to the armed forces. The
slim, top secret document called the 'Raksha Mantri's Operational
Directives', usually updated once in a decade, asks the armed forces to
prepare for the possibility of a simultaneous war with both Pakistan and
China.

What the document doesn't mention, however, is the army's
glaring inability to fight and win simultaneous wars with Pakistan and
China. "We presently have barely enough to hold both fronts," a senior
army official says. The gap between military strategy and capability
emerged at army vice chief Lt Gen. Sarath Chand's recent deposition
before the parliamentary standing committee (PSC) on defence. In the
report, which was tabled before Parliament on March 13, the army vice
chief said that 65 per cent of its arsenal is obsolete. The force lacks
the artillery, missiles and helicopters that will enable it to fight on
two fronts. Worse, even existing deficiencies in the import of
ammunition are yet to be met, part of what the army calls is its ability
to fight a '10 day intense' or 10(I) war have not been met. An
'intense' war is primarily related to the consumption of ammunition
where tanks and artillery can fire up to three times the number of
shells and rockets than would be used in a 'normal' conflict.

The
army's angst relates to the short shrift it was given in this year's
budget, which it says is insufficient to stock up for this 10(I)
scenario. The army had asked for Rs 37,121 crore to fund 125 schemes. In
the end, it received Rs 21,338 crore in the Union budget presented on
February 1, a shortfall of Rs 15,783 crore.

All of the Rs 21,338
crore the army gets will be swallowed by pre-committed liabilities-the
military equivalent of EMIs the army pays out for equipment it has
bought over the past few years. This leaves a deficit of over Rs 15,000
crore and no money to fund 125 (purchase) schemes, as the vice chief
said. These buys range from light utility helicopters to anti-tank
missiles, ammunition and air defence missiles to small arms like assault
rifles, light machine guns and carbines, requirements worth over Rs
43,000 crore that have been in the pipeline for a decade and are now
close to conclusion (see Hardware Squeeze).

This means one of two
things-the army simply puts off the buying until the next year or goes
back to the finance ministry, hat in hand, asking for a financial
bailout. In either case, it is no-win situation. The committed
liabilities it is unable to pay for in 2017 get passed on to 2018,
increasing its financial burden. And the finance ministry rarely allows
for out-of-budget funding. Even the post-surgical strike fast-track
purchases of 19 contracts for Rs 11,739 crore, the services discovered
to their horror, were deducted from the military budget, not as an
additional sanction.

A fiscal freeze has already set in at the
South Block, with officials saying money is not being released even for
recently initialled contracts, stalling approved projects. Announcements
are plenty but contracts being signed few. Even the government's pet
Make in India contracts have suffered-a Rs 670 crore contract to upgrade
468 of the army's Zu-23 anti-aircraft guns by private firm Punj Lloyd
has been stuck at the defence ministry since late last year.

"The
possibility of a two-front war is a reality," the vice chief told the
standing committee early this year. "It is important that we are
conscious of the issue and pay attention to our modernisation and fill
up our deficiencies... however, the current budget does little to
contribute to this requirement." The two-front war, meanwhile, threatens
to become a self-fulfilling prophecy. The 760 km Line of Control with
Pakistan is at its most violent since a 2003 ceasefire, with almost
daily incidents of firing. The 4,000 km Line of Actual Control with
China saw a war-like situation during the 72-day standoff at Doklam in
Bhutan last year, with India rushing tanks and troops to the border and
the Eastern Army Command going on alert. The impasse was diplomatically
resolved on August 28, 2017, but not before it alerted the army to
critical gaps in preparedness, particularly the unfinished roads and
bridges in the mountains even as the bellicose state-owned Chinese media
threatened war.

India's current defence spend as a percentage of
the GDP is just 1.6 per cent (not counting pensions), the lowest since
the 1962 war, as military analysts ominously draw parallels with the
scenario when a poorly equipped army was routed by the Chinese army.
China's $175 billion military spend is three times that of India's $45
billion.

Last year, India's armed forces asked the government to
sanction $400 billion under the 13th five-year plan between 2017 and
2022 to modernise the three armed forces. Indicating a hike of well over
2 per cent of the budget, it appears unlikely given the existing
pattern of stagnant defence allotment. "The aim of our military
modernisation is to deter conflict," a senior military planner says. "By
degrading our deterrence and weakening ourselves, we actually make
ourselves vulnerable because we allow the other side to contemplate
military action resulting in us having to fight on two fronts."

NOT CRYING WOLF ::

Deficiencies
and shortages in the military, particularly the army, which accounts
for 50 per cent of the $45 billion defence budget, might have a
familiar, several decades-old ring to it. The channels for the armed
forces to directly communicate these shortages to the political
executive are narrowing. Some years ago, the annual state-of-the-forces
presentations made by service chiefs was converted into a letter-writing
exercise. In 2012, when one such letter from then army chief General
V.K. Singh, complaining of his force having been hollowed by
neglect-tanks without ammunition, air defence batteries without missiles
and the infantry without anti-tank missiles-leaked out to the media,
even this exercise was scrapped. Since then, presentations before the
PSC on defence are the only platform for the army to talk of
deficiencies. These presentations are left to the vice chief, who is
responsible for the planning and acquisition wings that steer the army's
battle preparedness. The picture they have painted-of a military
machine in decay and of sustained budgetary neglect by the government-is
an alarming one. In 2015, army vice chief Lt Gen. Philip Campose told
the PSC that nearly 50 per cent of the military machine was obsolete.
Four years later, that figure has jumped further to 65 per cent, as Lt
Gen. Sarath Chand said.

A broken indigenous military-industrial
complex incapable of meeting all its defence needs means India has
become the world's largest arms importer, even for ammunition.

Stocking
imported ammunition, especially for specialised frontline weapons to
fight a 10-day intensive war, is expensive. A few years ago, the army
drastically scaled down its projections for fighting a 40(I)war down to
fighting a 10(I) war. Even this goal remains beyond reach. The army
needs over Rs 2,000 crore just to buy 3,744 rockets for all 42 launchers
of the Russian-made 'Smerch' 300 mm rocket launchers for a 10(I) war.

The
defence minister dismissed concerns over the army's budgetary
shortfalls. "Our focus has been to prioritise what we have. We are
ensuring maximum utilisation of funds. Things are happening in the
defence ministry," she told the media at the inaugural session of the
bi-annual Defexpo-2018 in Chennai on April 11.

A week later, on
April 18, the government announced the setting up of a Defence Planning
Committee (DPC) headed by National Security Advisor Ajit Doval to
outline a defence planning roadmap, set up strategic and
security-related doctrines, including the draft national security
strategy, the international defence engagement strategy and capability
development plans for the armed forces.

Sitharaman's
'prioritisation' mantra, meanwhile, to focus on urgently-needed hardware
and then push through with decision-making within the financial year,
has been conveyed to the armed forces. It apparently flows from twin
realisations within the ministry-major hikes in defence spending are
unlikely, particularly with the government emphasis on infrastructure.
This year's budget, for instance, allocated Rs 5.97 lakh crore to
infrastructure, more than three times what was allocated in 2014-15.

The
defence ministry, as is commonly known, has a hard time even
effectively spending available allocations to buy hardware. An internal
study presented before the Prime Ministers Office in late November by
the minister of state for defence Subhash Bhamre was scathing about the
ministry's functioning. A study by the Headquarters Integrated Defence
Staff found that 144 schemes contracted between 2014 and 2017 took an
average of 52 months to conclude, more than twice the stipulated 16 to
22-month period. To blame were 'multiple and diffused structures with no
single-point accountability, multiple decision-making heads,
duplication of processes-avoidable redundant layers doing the same thing
over and over again, delayed comments, delayed decision, delayed
execution, no real-time monitoring, no programme/project-based approach,
tendency to fault-find rather than to facilitate'.

MEN OVER MACHINES ::

A
shrinking capital budget affects all three services, particularly the
hardware-dependent air force and the navy which have their own two-front
contingencies. Last month, the IAF's largest exercise in three decades,
Gaganshakti 2018, which saw Su-30 MKI fighter jets flying from Assam to
the Arabian Sea over 4,000 km away, projected requirements for 110 new
combat jets worth an estimated $18 billion. The navy, which carried out
twin manoeuvres along its eastern and western coasts this year, worries
whether it can afford critically needed force multipliers such as new
helicopters and submarines. Manpower costs have been growing
exponentially-from 44 per cent in 2010-11 to 56 per cent this year.
Capital expenditure has declined in the same period from 26 to 18 per
cent. A combination of GST and sales tax on defence imports (they were
earlier exempt) have added 15 per cent costs to an already shrinking
capital acquisition pie.

Yet, this budgetary imbalance affects
the world's third largest army the most. It accounts for 85 per cent of
the uniformed services but only 55 per cent of the defence budget. The
army's predicament is actually the result of a slow convergence of
multiple maladies: it is growing by adding on costly manpower, its
military machine is heading towards obsolescence and sustained budgetary
neglect has constricted replacement of its equipment.

India
spends close to $15 billion on pensions for its nearly 3 million
retirees, nearly double Pakistan's entire military budget of $9.6
billion. Pensions come out of the MoD budget, not the defence budget,
yet the finance ministry considers them part of the overall defence
expenditure. The army presently spends 83 per cent of its budget on
revenue expenditure, paying salaries and for maintenance of equipment
and facilities. "Trends indicate that this revenue to capital
expenditure ratio could go down to an extremely unhealthy 90:10 in the
coming years, against an ideal of 60:40," says Laxman Behera who tracks
military budgets at the MoD think-tank Institute of Defence Studies and
Analyses (IDSA).

The army is progressively adding on 88,000
soldiers to staff a new Mountain Strike Corps. (The British army has a
total of 80,000 soldiers.) The additional cost of these troops is pegged
at Rs 64,000 crore. Two divisions, 56 and 71, have already been raised
for the Panagarh-based 17 Corps, two more divisions are to be raised.
While this strike corps-meant to launch limited offensives into Chinese
territory in the event of a border war-was swiftly sanctioned by the UPA
in 2014, it did not provide for the nearly Rs 10,000 crore annually it
would take to equip this formation. The budgetary neglect which has
continued under the NDA government has seen the army cannibalising its
war wastage reserves-the critical weapons and ammunition it sets aside
to be used in conflict-to equip the strike corps. The intended capacity
of the strike corps-land a swift conventional punch against China-has
now turned into a giant anaconda, slowly squeezing the life out of the
army's modernisation budgets.

It is not that the army did not
foresee the implications of adding more men. A draft report titled
'Rebalance and Restructuring' that sits within the files of the army's
Perspective Planning directorate had warned of this scenario. This study
was commissioned by the then army chief Gen. Bikram Singh in 2012 at
around the time the army had accelerated its push for the Mountain
Strike Corps. The study explored the costs of additional manpower on the
army in the light of two vectors-the Seventh Pay Commission, which
would hike salaries and pensions, and the raising of the new strike
corps. The report threw up alarming figures-each additional soldier
would cost the army over Rs 12 lakh a year. It also suggested a way
out-for the army to thin out existing formations to build up the strike
corps, thus not having to recruit more soldiers. The army pulled the
plug on this study because it feared that the bureaucracy would use it
to deny manpower. Army officials say there is one very important reason
for their mistrust-manpower savings are never ploughed back into the
military but go instead to the Consolidated Fund of India. This is
primarily because while expenditure on manpower is met from the revenue
budget, capital acquisitions are funded from the capital outlay. "Even
within the revenue budget, money allocated for pay and allowances cannot
be diverted for other purposes. But this can be done by the finance
ministry and indeed there have been instances in the past where this was
done," says Amit Cowshish, former financial advisor (acquisition) in
the MoD.

"The only way the shortfall, primarily in the committed
liabilities, can be bridged is by internal reappropriation either within
the army's budget heads or by transferring money from other services/
departments within the overall capital outlay," Cowshish says. Another
option is for the MoD to ask for additional funds during the year or at
the revised estimate stage from the finance ministry.

The last
attempt at rationalisation was made 20 years ago in 1998 when General
V.P. Malik ordered the 'suppression' of 50,000 personnel from non-field
forces with the assurance that the money saved would be given for
purchasing military hardware. The MoD didn't follow on this assurance
and the Kargil war which broke out the following year saw the army
shelving this proposal.

Staring at massive shortfalls in
ammunition, especially for the 155 mm Bofors howitzers which finally
turned the tide of the war, Gen. Malik made the famous statement that
the army would 'fight with what it had'. This philosophy seems to have
been embraced by his successor Gen. Bipin Rawat, nearly two decades on.
The army has now snapped up the government's prioritisation mantra.

"It
is possible to reprioritise and readjust the budget within the existing
money available, by giving the operational preparedness a higher
priority," Gen. Rawat said on March 28. "This is not to say that
accommodation for families is not needed, but they can take some time.
We are balancing the budget to focus on operational preparedness."

In
his opening remarks at the biannual army commanders' conference in New
Delhi between April 16 and 21, Gen. Rawat stressed the need to
'judiciously lay down priorities to ensure that the allocated resources
are utilised optimally and the force modernisation be carried out
unabated'. The army also made the unprecedented move of making public
its deficiencies, saying it was resigned to holding less than 10-day
stocks for tank ammunition, anti-tank missiles and, yes, Smerch rockets.

A
long-standing premise guiding India's military preparedness is that
'China might not join an India-Pakistan war, but Pakistan will certainly
join an Indo-China war'.

The Indian army and air force are
deployed on two fronts, a northern one against China, and a western one
against Pakistan. When it has to fight on one front, it can transfer all
troops, fighter aircraft and resources from the other front to notch a
decisive victory. A two-front war means such inter-front resource
switchover is not possible. Each front has to be addressed with the
available resources, impeding a decisive win.

The two-front war,
sometimes enlarged into a two-and-a-half-front war (the half being
insurgencies in Kashmir and the Northeast) is a covenant, an article of
faith from which there is no turning back and the single-minded focus to
obtain a greater share of military budget in the foreseeable future.
There is no debate, despite some of the army commanders who are actually
meant to fight this war publicly questioning it. The western army
commander, Lt Gen. Surinder Singh, who, in a seminar in Chandigarh on
March 1, said it was 'not a smart idea' to be fighting on two fronts, is
believed to have been pulled up for airing his views publicly.

HALF-HEARTED REFORM ::

The
Indian military's malaise is far deeper than it seems. These are not
issues which can be solved merely by throwing more money at them.
Possibly every single problem, including those of a fund-starved army
and tardy modernisation, can be traced back to India's dysfunctional
higher defence management. Efficient defence management would harmonise
resources and allocate them based on priority. The US national security
strategy, for instance, dictates a national defense strategy from which,
in turn, flows a national military strategy which the joint forces
adhere to. The armed forces are tightly integrated under joint forces
commands.

All five countries sitting on the high table of the
United Nations Security Council, a seat India aspires to, have one thing
in common. They have a military-industrial complex that ensures they
are not dependent on imports and closely integrated militaries that are
being modernised for future challenges.

While the government has
prioritised indigenous defence manufacture under Make in India, it has
been slow to move on higher military reform and long-term planning. It
has, for instance, no national security strategy, the RM's Op Directives
being the closest India gets to one, and even those are based on inputs
provided by the armed forces. A general terms the lack of a national
security strategy as akin to playing a football match without goalposts.
Security analysts dismissed the 2017 Joint Doctrine of the Armed Forces
as a joke simply because there are no synergies in either planning,
procurement or operations. Piqued by the lack of synergy among the
services, the navy in 2016 took back the strategic Andaman & Nicobar
command it had once offered to be held in rotation by the army and the
air force.

In a seminal 2017 paper for the army think-tank Centre
for Land Warfare Studies, Lt Gen. Campose outlined what happens in the
absence of an integrated military. 'The Indian army plans to go ahead
and fight its land wars independently, the air force focuses on the air
war, the navy on the sea war, with insufficient sharing of resources and
operational synergy between them.'

Two successive committees,
the Group of Ministers headed by then home minister L.K. Advani in 2001,
and another one by Lt General D.B. Shekatkar in December 2016,
recommended the creation of a Chief of Defence Staff (CDS), a position
to be manned by a four-star officer from one of the services, who can
not only act as a single-point military adviser to the government, but
also foster jointness and reprioritise armed forces' budgets towards
specific needs. The government is yet to act on appointing the CDS who
could, for instance, question extravagances such as the army's purchase
of six expensive Apache helicopter gunships for $650 million last year
when the IAF is already buying 22 of the same machines.

The
neglect is glaring because the government clearly does not believe a
two-front war could be a reality. A senior government official calls the
whole debate 'misplaced', decrying the futility of preparing for the
worst-case scenario. "We should talk about probability and not
possibility. The possibility of such a scenario exists, not the
probability," he says.

Prime Minister Narendra Modi's informal
summit with Chinese President Xi Jinping in Wuhan was part of an attempt
to reduce tensions along the border. It will buy the Indian military
time to prepare themselves because, as the armed forces argue,
intentions change overnight, military capabilities need decades to
build.

One of Xi's first goals after taking over in 2012 was to
downsize the 2.3 million-strong People's Liberation Army by a million
(see The New Red Army) and, more recently, push for a leaner, agile,
technologically-driven force by 2035.

India's political
leadership has been wary of the armed forces' manpower binge. In a rare
articulation
of its discomfort, PM Modi, at a combined commanders'
conference in December 2015, said, "When major powers are reducing their
forces and relying more on technology, we are still seeking to expand
the size of our forces. Modernisation and expansion of the forces at the
same time is a difficult, and unnecessary goal."

Little,
however, has been done to suggest a reprioritisation of military
resources away from concepts like a two-front war or put in place
reforms that can ensure bigger savings or set goals for a modern, agile,
technology-centric military. These reforms could now hopefully take off
with the setting up of the DPC headed by NSA Doval. It is another step
where many others have failed.